When the infomercial company Beachbody introduced a set of fitness DVDs called P90X in 2005, the product bombed. Carl Daikeler explains how he turned it into $700m in sales.
When the infomercial company Beachbody introduced a $120 set of home fitness DVDs called P90X in 2005, the product bombed. Even Carl Daikeler knew it was a long shot--would home shoppers really sign up for six days a week of strenuous pushups, pull-ups, yoga, and weightlifting? Today, P90X has generated more than $700 million in sales. As told to Burt Helm.
The first infomercial was an absolute dud. One of our primary measures of success is media cost, and when it started, we paid the equivalent of $250 per order. That's a tough way to make a business when you're selling a $120 product.
2005 was our roughest year. The hot gadgets that year were weight-loss belts--you put them on and jiggle your way to fitness. They were difficult to sell against, because we always have been selling hard work. Our revenue sank to $83 million from over $100 million the year before.
We kept testing and changing the P90X infomercial. We'd do a focus group and find out people didn't understand what equipment they'd need, so we'd add that. Or we'd add a new, better testimonial from a customer. We started adding people's homemade YouTube videos. We got the cost from $250 to $225. Then $190.
Still, I literally was in shouting matches with marketing people here: "Can we please stop trying to make this work?" they'd say. But it wasn't blind faith. It was just that we kept seeing progress in every test we'd do.
In 2007, our 22nd version of the infomercial clicked. It just took off. Eventually we would get the media cost, net-net, down to under $50 per new customer.
The first celebrity we heard about was Sheryl Crow. A reporter at the 2009 Grammys asked how she stayed in shape, and she did a commercial for P90X right there on the red carpet. I had no idea she was a customer. We never paid a celebrity.
Next we heard Jennifer Aniston was doing it. We heard the trainer for the Philadelphia Eagles was using it with some players. Ashton Kutcher wouldn't stop talking about P90X on Twitter.
In 2010, we got invited to a fundraiser in Philadelphia, a chance to meet President Obama. The guy who facilitated it introduced us: "Mr. President, this is Carl Daikeler and Jon Congdon. They run Beachbody, the company that created P90X."
Now, you gotta remember, I've been an infomercial guy for the past 25 years. I'm used to being not the bottom of the barrel, but if you lift the barrel up and look underneath it--that's where infomercials are. And here's the leader of the free world, saying, "P90X? My wife does P90X! In fact, my Secret Service crew is doing P90X. They love it!"
It was like time stopped. Jon and I looked at each other like, Are you kidding me? Our little infomercial product with the silly name, the acronym we argued over for hours in the office, is being used by the First Lady.
BURT HELM is a senior writer for Inc. magazine. In 2013, his Inc. feature “After the Squeeze” was awarded the Stephen Barr Award for Feature writing, and his stories “After the Squeeze,” and “Turntable.fm: Where Did the Love Go?” received awards from Society of American Business Editors and Writers. Prior to Inc. he worked as a reporter for Bloomberg News and a department editor for Businessweek. He is a graduate of Yale University with a double major in Physics and English. He lives in Brooklyn, NY. @burthelm